CapitaLand Mall Trust share price: 3 highlights from H1 earnings

Here are three key trading takeaways from CapitaMall Trust's (SGX: C38U) latest financial update.

CapitaLand Mall Trust (SGX: C38U) released its first half (H1) and Q2 earnings for fiscal 2020 on Wednesday 22 July 2020.

Here are three main highlights from the retail-focused real estate investment trust’s (REIT) latest financial update.

1. CapitaMall Trust’s H1 2020 DPU (dividend) drops by 49%

The company posted a net property income of S$216.4 million for the period 01 January to 30 June 2020, 20.8% lower than the same period a year prior.

Gross revenue for H1 2020 fell to S$318.4 million from S$382.3 million in H1 2019.

Distributable income for H1 2020 came in at S$109.7 million – down 48.7% from H1 2019, with distribution per unit (dividends in REIT terms) amounting to S$0.0296 – down 49% from H1 2019’s S$0.0580.

The group said that the lower earnings was mainly due to lower gross rental income arising from the rental waivers of S$76.5 million granted to tenants affected by Covid-19, as well as lower gross turnover rent and car park income during Singapore’s lockdown period.

On a quarterly basis, distributable income for the second quarter ended 30 June 2020 fell 27.5% year-on-year to S$78.1 million from S$108 million. The company said that this included the release of S$23.2 million or one-third of the S$69.6 million taxable distributable income retained in 1Q 2020.

Consequently, distribution per unit (DPU) for Q2 was S$0.0211 – 27.7% lower than in Q2 2019.

DPU will be paid out to unitholders on 28 August 2020.

2. CapitaMall Trust outlook: ‘cautious view of near-term conditions’

In terms of outlook, Tony Tan, CEO of CapitaLand Mall Trust Management Limited, said that although the phased reopening of Singapore’s economy from June 2020 has brought some relief to businesses, the company continues to maintain ‘a cautious view of near-term market conditions, given the uncertain economic climate and softening demand for retail space.

Consequently, the group stated that it will retain the balance S$46.4 million of taxable distributable income from Q1 2020, after releasing S$23.2 million in Q2 2020.

IG’s industry-leading CFD trading platform allows you to buy long and sell short CapitaMall Trust shares without having to trade the actual asset. Start today by opening a live or demo IG account.

Notwithstanding, Tan did note that between 19 June and 05 July – when lockdown restrictions began to be eased – average shopper traffic for the period managed to recover to 53% of the level a year ago.

‘Although CapitaLand Mall Trust’s operating performance is still below pre-Covid-19 levels, we are encouraged by the weekly improvements in shopper traffic since reopening,’ he said.

‘In the meantime, we are sparing no effort to enhance operational efficiency and build greater resilience into CapitaLand Mall Trust’s retail ecosystem in preparation for the eventual upturn.’

3. CapitaMall Trust received higher share price targets

Following the release of its H1 report, CapitaLand Mall Trust shares opened slightly lower on Wednesday 22 July at S$2.01 a share.

Analysts from UOB and DBS earlier this month gave the stock a ‘buy’ rating, alongside higher 12-month price targets, citing the recovery of the retail sector with the easing of lockdown measures as a catalyst.

UOB gave the stock a price target of S$2.60, stating that shares could rally in the coming months with more retail shops resuming operations, a recovery in consumer spending as the Singapore economy recovers from the pandemic, and the impending merger of CapitaLand Mall Trust and CapitaLand Commercial Trust.

DBS analysts raised their fair value price estimates to S$2.40 a share (From S$2.15 previously), on the expectations for a potential boost to the REIT’s central malls as the office crowds return.

‘As the worst looks to be over, CMT offers a strong value proposition as it trades near a historical high yield premium of 70bps against peer, Frasers Centrepoint Trust, with DPU recovering 22% y-o-y in FY21 based on our estimates,’ they wrote.

Key risks to this positive view, they added, is a spike in new Covid-19 cases that could potentially delay other impending lockdown easing measures and further tenant rebate measures to impact their FY20 estimates.

How to trade Singapore REITs with IG

Are you feeling bullish or bearish on CapitaLand Integrated Commercial Trust stocks? Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  • Create a live or demo IG Trading Account, or log in to your existing account
  • Enter <CapitaLand Mall Trust> in the search bar and select the instrument
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

React to global volatility

Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:

  • Tight spreads – from just 1 point on major indices, and 2.8 on US crude
  • Guaranteed stops – they’re free to use, and only incur a fee when triggered
  • Round-the-clock assistance – our highly skilled team are available when you need support

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.